Credit Cards NZ
  • Home
  • Card Types
    • Airpoints Credit Cards
    • Balance Transfer Credit Cards
    • Best Credit Cards in NZ
    • Best Credit Card Rewards
    • Business Credit Cards
    • CashBack Credit Cards
    • Free Airport Lounge Access Cards
    • Frequent Flyer Credit Cards
    • Interest Free Credit Cards
    • Low Interest Credit Cards
    • No annual Fee Credit Cards
    • Rewards Credit Cards
    • Travel Credit Cards
    • 0% Balance Transfer Credit Cards
    • Best Credit Card Types
      • Best Airpoints Credit Cards in NZ
      • Best Credit Card for Family Travel
      • Best Credit Card Rewards NZ
    • More Credit Card Types…
      • Air New Zealand Credit Cards
      • Koru Membership Credit Cards
      • Credit card Finder
      • Free Credit Card
      • Flybuys Credit Cards
      • Sign Up Bonus Credit Cards
      • Travel Insurance Credit Cards
      • Instant Approval Credit Cards
      • Mastercard Credit Cards
      • No Foreign Transaction Fee Credit Cards
      • Prestige Credit Cards
      • Priority Pass Credit Cards
      • Store Credit Cards
      • Student Credit Cards
      • Visa Credit Cards
  • Card Providers
    • Air New Zealand Credit Cards
    • Amex Credit Cards
    • ANZ Credit Cards
    • ASB Credit Cards
    • BNZ Credit Cards
    • Farmers Credit Card
    • Flight Centre Credit Card
    • Kiwibank Credit Cards
    • Q Card Credit Cards
    • SBS Bank Credit Cards
    • The Co-operative Bank Credit Cards
    • TSB Credit Cards
    • Westpac Credit Cards
    • More Card Providers
      • Air NZ Credit Cards
      • Countdown Credit Cards
      • HSBC Credit Cards
      • Warehouse Money Credit Cards
      • Qantas Credit Cards
  • About
    • About Us
    • Contact Us
    • Write for us
    • Advertising
  • Articles
    • Wise Travel Card Review
    • Is Airpoints Worth it?
    • Is a Wise Card worth it?
    • Is a Travelex Money Card worth it?
    • What is the best way to take money overseas?
    • More Articles
Credit Cards NZ
  • Home
  • Card Types
    • Airpoints Credit Cards
    • Balance Transfer Credit Cards
    • Best Credit Cards in NZ
    • Best Credit Card Rewards
    • Business Credit Cards
    • CashBack Credit Cards
    • Free Airport Lounge Access Cards
    • Frequent Flyer Credit Cards
    • Interest Free Credit Cards
    • Low Interest Credit Cards
    • No annual Fee Credit Cards
    • Rewards Credit Cards
    • Travel Credit Cards
    • 0% Balance Transfer Credit Cards
    • Best Credit Card Types
      • Best Airpoints Credit Cards in NZ
      • Best Credit Card for Family Travel
      • Best Credit Card Rewards NZ
    • More Credit Card Types…
      • Air New Zealand Credit Cards
      • Koru Membership Credit Cards
      • Credit card Finder
      • Free Credit Card
      • Flybuys Credit Cards
      • Sign Up Bonus Credit Cards
      • Travel Insurance Credit Cards
      • Instant Approval Credit Cards
      • Mastercard Credit Cards
      • No Foreign Transaction Fee Credit Cards
      • Prestige Credit Cards
      • Priority Pass Credit Cards
      • Store Credit Cards
      • Student Credit Cards
      • Visa Credit Cards
  • Card Providers
    • Air New Zealand Credit Cards
    • Amex Credit Cards
    • ANZ Credit Cards
    • ASB Credit Cards
    • BNZ Credit Cards
    • Farmers Credit Card
    • Flight Centre Credit Card
    • Kiwibank Credit Cards
    • Q Card Credit Cards
    • SBS Bank Credit Cards
    • The Co-operative Bank Credit Cards
    • TSB Credit Cards
    • Westpac Credit Cards
    • More Card Providers
      • Air NZ Credit Cards
      • Countdown Credit Cards
      • HSBC Credit Cards
      • Warehouse Money Credit Cards
      • Qantas Credit Cards
  • About
    • About Us
    • Contact Us
    • Write for us
    • Advertising
  • Articles
    • Wise Travel Card Review
    • Is Airpoints Worth it?
    • Is a Wise Card worth it?
    • Is a Travelex Money Card worth it?
    • What is the best way to take money overseas?
    • More Articles

What is a Credit Card?

What is a credit card and how does it work

A credit card is an unsecured loan facility which is normally issued in the form of a small plastic card that can easily fit in a wallet and includes the credit card details, such as the credit card number and card name, and other encoded information on a computer chip or magnetic strip as shown below.

Credit Card example
Caption: Example of a plastic credit card from Westpac New Zealand

A credit card is a convenient way of borrowing money as it provides you with a line of credit which is always available to you when you need it. Credit cards can help you manage short term cash flow problems by allowing you to quickly and easily borrow money for short term use. Digital versions of credit cards also exist that can be loaded onto a smartphone or onto a multi-card device.

Credit Card Providers

The three biggest credit card companies that make up the global credit card payment network include: Mastercard®, Visa and American Express®. American Express tends to issue its credit cards directly, whereas Mastercard and Visa often partner with banks and financial institutions to issue their credit cards.

How do Credit Cards Work?

You usually apply for a credit card with a Bank, Financial institution or directly with the credit card providers such as Amex. When you apply for a credit card you can nominate your maximum credit limit and this would be assessed by the credit card issuer and a maximum credit limit would be assigned to your credit card.

In some cases, the credit card provider may assign a credit limit lower than the amount you have nominated, especially if the amount you nominated is higher than the amount allowed for the credit card type. Credit cards also often have minimum credit limits, so if you nominate an amount lower the the minimum limit you would be allocated the minimum limit. This credit limit is a line of credit that you can use to make purchases in store or online or even withdraw as cash directly from the ATM.

Interest Free Period:

Credit cards offer interest free periods of usually about 55 days (some cards offer fewer or more interest free days). During the interest free period, you would not be charged any interest on purchases you make, but if you fail to payback your credit card balance by the last day of the interest free period you would be charged interest on the amount owed.

It is important to note that interest-free periods do NOT often apply to cash withdrawals made with your NZ credit card. When you withdraw cash directly using your credit card, it usually begins to incur interest on the very same day. Also, cash withdrawal often attracts a higher interest rate than purchases.

Note: some interest free credit cards do offer interest free periods of about 6 to 12 months, but this is not common and only applies to specific no interest credit cards.

Rewards:

Some NZ credit cards offer reward points just for using them. This is because credit card providers such as Mastercard and Visa charge businesses a fee for each credit card transaction you make. Rewards often come in the form of reward points schemes in which you earn reward points for every dollar you spend. You can then use the accumulated reward points for purchases, or in some cases, redeem your points for cash.

Credit card providers also sometimes offer other benefits such as free travel insurance, travel lounge access, purchase protection and more. You can find a list of rewards cards on our Rewards credit cards page.

Balance Transfer:

Some credit cards offer balance transfers, which allow you to transfer your existing credit card debt from another card and repay at a lower rate of often 0% for fixed period.

Considering getting a credit card?

The best credit card for you would depend on your personal circumstance and how you intend to use your credit card. We have put together a list of some of the best credit cards in New Zealand to help you find the best credit card in NZ to suit your individual needs. Alternatively, you can narrow down your search by credit card type such as interest free credit card, low rate credit card, balance transfer, credit card reward or air nz credit card

For more information and tips to help you choose the best credit card in NZ, visit our website Credit Cards Compare.

Posted 1 November 2020
Post underCredit management, Guides, Personal finance
PrevNext

Credit Card Providers

  • Amex
  • ANZ
  • Westpac
  • Kiwibank
  • ASB
  • BNZ
  • SBS Bank
  • Cooperative Bank
  • HSBC
  • TSB
  • Countdown
  • Farmers
  • Q Cards
  • Flight Centre
  • Gem
  • Warehouse
  • Mastercard
  • Visa
The American Express Airpoints Credit Card
Get 0% p.a. on purchases for the first 6 months with the Amex Airpoints Credit Card, plus NO ANNUAL FEE and you earn 1 Air NZ Airpoints DollarTM for every $100 you spend with the Card. CURRENT OFFER: 50 bonus Airpoints Dollars™ when you apply, are approved and spend $750 on your new Card within the first 3 months. New Card Members only.
More Info »
*Terms and conditions apply

Popular Pages

  • Credit Card Finder
  • Apply for a credit card online guide
  • Kiwibank Credit Cards
  • BNZ Credit Cards
  • 0% Balance Transfer Cards
  • Balance Transfer NZ
The American Express Airpoints Platinum Card
The Amex Airpoints Platinum Card is the FASTEST Air NZ Airpoints DollarTM earning Platinum credit card. Every $70 you spend earns you 1 Airpoints Dollar. This card also includes complimentary Travel Insurance, VIP Lounge access and more. CURRENT OFFER: Be rewarded with 400 bonus Airpoints Dollars™ when you apply, are approved and spend $1,500 on your new Card within the first 3 months. New Amex Card Members only. Offer ends 26th May 2025.
More Info »
*Terms and conditions apply

Credit Card Types

  • Air NZ credit cards
  • Airpoints credit card
  • Balance transfer credit cards
  • Balance transfer NZ
  • Best credit cards
  • Best credit card rewards
  • Cashback credit cards
  • Credit card balance transfer
  • Credit cards rewards
  • Credit cards with lounge access
  • Credit card with travel insurance
  • Free credit cards
  • Frequent flyer credit cards
  • Interest free credit card
  • Low Interest rate credit cards
  • No-annual fee credit cards
  • Prestige credit cards
  • Rewards credit cards
  • Students credit cards
  • Travel credit cards
  • Travel insurance credit cards
  • More card types...

Useful Information

  • About Us
  • Contact Us
  • Advertising
  • News and Articles
  • Terms of use
  • Privacy Policy
  • Credit Cards Compare
  • Sitemap

Recent Posts

  • No Annual Fee Credit Cards in NZ: Are They Worth It?
  • How Credit Card Interest Works in New Zealand: A Simple Guide
  • Pre-Approval vs Instant Approval: What Do NZ Credit Card Terms Really Mean?
  • How to Maximise Airpoints and Travel Perks with NZ Credit Cards
  • How to Compare NZ Credit Cards: What to Look for in 2025
  • Best Airpoints Credit Cards in NZ [2025 Edition]
  • From Screen Time to Side Hustle: Why a kid’s YouTube channel might be Worth more than you think

Popular Pages

  • How to apply for a credit card
  • Interest free credit cards
  • Low rate credit cards
  • Best credit card in NZ
  • Balance transfer credit cards
  • Credit card rewards
  • No-annual fee credit cards
  • Balance transfer NZ
  • Free credit card
  • Kiwibank credit cards
  • ASB credit cards
  • ANZ credit cards
  • Westpac credit cards
  • TSB credit cards
  • BNZ credit cards
  • Mastercard credit cards
  • Visa credit cards
  • The Warehouse credit cards

More information

  • Credit card blog
  • Credit cards
  • Credit card finder
  • Best credit card NZ
  • Apply for credit card
  • Credit cards compare NZ
  • Credit card types
  • Credit card comparison
  • Credit cards NZ
  • Credit card balance transfer
  • Balance transfer
  • NZ credit cards
  • Credit card NZ
  • Credit card online

About Us

Kia Ora! Credit cards compare NZ (also referred to as Credit cards comparison NZ or Credit cards NZ) is an absolutely free credit card comparison website. Each year we help tens of thousands of Kiwis save by finding the best credit card to suit their needs.

Credit cards compare NZ

CreditCardsCompare.co.nz (Credit Cards Compare NZ) is not a credit card provider and does not provide financial advice, we only provide factual and general information on our website to help you find the best credit card to suit your needs. Any financial advice that may be provided on this website is merely passed on from the credit card provider and does not take into account your personal circumstance. If you are unsure, seek independent professional advice before taking out a credit card.Credit Cards Compare NZ includes many but not all credit cards in NZ on our website. We may receive a commission for advertising/promoting certain credit cards and products on our website.
© Copyright 2022 operated by Credit Cards Compare NZ (ABN 14936155671)